SK Hynix ADR Jumps 4% as JPMorgan Sees $130 Billion More in Shareholder Returns After Buyback This Year

Shares of SK Hynix’s U.S.-listed American depositary receipts climbed 4.20%, or $6.56, to $162.72 as of 12:48 p.m. EDT Thursday, extending a sharp rally that began earlier this week after the South Korean memory chipmaker unveiled the largest share buyback and cancellation program in the country’s corporate history.

SK Hynix’s board approved a plan Wednesday to repurchase and cancel 40 trillion won, or roughly $28.6 billion, of its own shares, marking the largest treasury share cancellation ever undertaken by a listed South Korean company, according to Quartz. The board resolution covers approximately 24.07 million shares, or about 3.3% of the company’s total shares outstanding, based on the stock’s closing price of 1,662,000 won the day before the vote. The repurchase period runs from Thursday, Aug. 20, through Nov. 19, with every acquired share to be permanently canceled once the program concludes.

Alongside the buyback, SK Hynix said it intends to raise its shareholder return commitment for the 2025-to-2027 period, shifting the benchmark from what had previously been a ceiling of 50% of cumulative free cash flow to a new floor exceeding that level. According to Quartz, the company plans to deliver those returns through a combination of share repurchases, cancellations and cash dividends, including both fixed and special dividend payments currently under consideration.

Analysts have responded with considerable enthusiasm to the scale and structure of the announcement. In a note published Thursday, JPMorgan analyst Jay Kwon wrote that SK Hynix may follow up its new buyback with additional shareholder returns worth at least $130 billion through next year, according to Bloomberg. Kwon characterized the key takeaway from Wednesday’s announcement as SK Hynix’s decision to lift the overall ceiling on shareholder returns, noting the company is now pledging more than half of its cumulative free cash flow over 2025 through 2027, compared with the “up to 50%” language it had used previously.

Separately, TipRanks reported that SK Hynix received a buy rating reaffirmation from Bank of America Securities analyst Shawn Kim, who described the company’s newly enhanced shareholder-return framework and strengthening free cash flow outlook as key factors underpinning his continued bullish stance on the stock.

According to figures cited by cryptocurrency and markets outlet KuCoin, citing the Korea Economic Daily, SK Hynix’s broader shareholder return package, including both the share buyback and cash dividends, is expected to total approximately 100 trillion won, or roughly $71 billion. The 40 trillion won buyback component represents more than 2% of the company’s total issued shares, a scale that KuCoin noted is comparable to the proportion of new shares SK Hynix issued earlier this year for its landmark Nasdaq ADR listing. HSBC had previously argued that markets had priced in overly pessimistic expectations for SK Hynix’s earnings cycle, suggesting the new shareholder return plan could serve as a meaningful catalyst for improving the stock’s overall valuation.

Wednesday’s buyback announcement triggered an immediate rally in SK Hynix shares. According to TipRanks, the stock jumped 6% to $164.73 in the immediate aftermath of the news. That momentum extended into Thursday’s broader Asian market rally, with Investing.com reporting that Asian stocks climbed broadly as a U.S. Treasury Department move to increase purchases of long-dated government bonds helped ease pressure across global markets. SK Hynix and rival Samsung Electronics both surged as investors welcomed the record-setting buyback, with Samsung shares climbing nearly 9% to 269,750 won on Thursday following local media reports that the company was preparing to announce its own shareholder return program.

According to Reuters, cited via Investing.com, Samsung Electronics is set to announce a new shareholder return policy later this month worth more than $72 billion, a development that has added further fuel to the broader rally across South Korea’s dominant memory chip duo. Separately, Reuters reported Thursday that SK Hynix has agreed to pay 60% of employee bonuses in company shares, with the remaining 40% paid in cash, resolving a compensation dispute that had reportedly been a source of tension within the company earlier this year.

SK Hynix’s rally comes against the backdrop of an extraordinarily strong year for the stock more broadly. According to a recent analysis from Simply Wall St, SK Hynix’s one-year total shareholder return has surged 214%, with the stock’s 90-day share price return alone climbing nearly 95%, driven by renewed demand for memory chips and shifting industry optimism regarding the durability of artificial intelligence-related capital spending. The company’s most recent quarterly guidance, according to Investing.com, pointed to DRAM shipments rising approximately 10% quarter over quarter and NAND shipments rising in the low single digits, alongside 2026 capital expenditures targeted in the high 40 trillion won range as the company works to accelerate production at its M15X facility. Management also indicated it had secured long-term supply agreements with roughly 10 customers and is targeting volume production of its next-generation HBM4E high-bandwidth memory chips in 2027.

SK Hynix’s American depositary receipt listing itself has been one of the more significant developments in the company’s recent history. The chipmaker listed its ADRs on the Nasdaq earlier this year, raising $26.5 billion in what became the largest U.S. share sale ever completed by a foreign company, with each underlying common share represented by 10 individual ADRs, according to Quartz.

As a leading global supplier of both DRAM and NAND flash memory, SK Hynix holds roughly 33% and 21% market share in those respective categories as of the most recent available data, according to Morningstar, positioning the company as the world’s second-largest supplier in both product categories. SK Square, an investment management company spun off from SK Telecom, remains SK Hynix’s largest shareholder, currently holding roughly 20% of the company’s outstanding shares.

With Wednesday’s buyback announcement, Thursday’s broader Asian market rally, and JPMorgan’s projection of significantly more shareholder returns still to come, investors are likely to continue closely monitoring how SK Hynix balances its aggressive capital return commitments against continued heavy capital expenditure tied to expanding high-bandwidth memory production capacity, as the company works to sustain its position at the center of the ongoing global AI infrastructure buildout heading into the remainder of 2026 and beyond.